Pension Schemes Bill seeks to boost returns and UK investment

Plans to overhaul parts of the pensions sector - through consolidation, a greater focus on overall returns, the possibility of some mandatory UK investment and other measures - are to be introduced through the Pension Schemes Bill.

By Neasa MacErlean

Defined contribution (DC) multi-employer pension schemes will, in most cases, need to have assets under management, at the arrangement level, of at least £25 billion by 2030. Exceptions will include a transition pathway and new multi-employer Collective Defined Contribution (CDC) pension schemes, according to the final report of the Pensions Investment Review published at the end of May. Under the transition measures, schemes with £10bn under management at 2030 must provide the regulator with "a credible plan" to reach £25bn by 2035. The CDCs - new market entrants with "innovative products" which offer "something significantly different" - could play "a significant role" in the future, and will be exempted from the £25bn rule at least for the initial phase of their development. The Government's overall approach in the report has been welcomed by the industry, which is already going through a period of consolidation.